TaxTMI 
TaxTMI 
2017 (8) TMI 715
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....8 of the I.T. Act. Under the facts and circumstances of the matter, he ought not to have confirmed the same. 3. Without prejudice to Ground of Appeal No.1 above, on facts and in law, the learned CIT(A) had failed to appreciate that cash withdrawn/cheque issued ought to have been considered while computing income u/s.68 being the deposits made in the Bank Accounts. 4. Without prejudice to Ground of Appeal No.2 above, on facts and in law, the learned CIT(A) had failed to appreciate that more than Rs. 1,70,000/- cash was available to the appellant during the year, hence no addition in respect of the opening cash balance of Rs.l,70,000/- ought to have been confirmed by the learned CIT(A). 5. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing of the appeal, so as to enable the Hon. ITAT to decide this appeal according to law." 2. Briefly stated, the facts of the case are that the assessee who is a partner in a firm, viz. M/s Nanak Jee Raychand and Company and deriving income by way of share of profit, remuneration and interest on capital from the said firm had filed his return of....
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....the same bank account. Thus the assessee till 08.01.2013 tried his level best to impress upon the A.O that he was holding only two bank accounts, viz. (i) S.B. Account No. 4605 with Citizen Credit Cooperative Bank, Branch: Dadar, Mumbai; and (ii) S.B. Account No. 15050100036852 with Federal Bank Ltd, Branch: Dadar (West), Mumbai. 4. The A.O however in the backdrop of the AIR information in his possession, which revealed that the assessee had made a cash deposit of Rs. 31,54,000/- with Federal Bank Ltd, Branch: Dadar (West), Mumbai, therefore referring to the said information called upon the assessee to explain the cash deposit of Rs. 31,54,000/- which was deposited by the assessee with Federal Bank Ltd. The assessee vide his reply dated 08.01.2013 declined of having made a cash deposit of Rs. 31,54,000/- with Federal Bank Ltd., and persisted that he had only deposited an amount of Rs. 4,01,000/- in his account held with the said bank. The reply of the assessee so furnished with the A.O is reproduced as under:- "7. Please refer to the AIR in which your honour has stated that Cash of Rs. 31,54,000/- was deposited in Federal Bank Ltd. In this connection, please note that I have dep....
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.... Account No. 15050100030087 which was held by the assessee with the bank during the period 01.04.2009 to 20.07.2009. That a perusal of the SB Account No. 15050100030087 which was now made available by the bank to the A.O, therein revealed that the assessee had not only made a cash deposit of Rs. 31,19,000/- in the said account, but had also deposited various cheques aggregating to Rs. 20,37,955/- during the year under consideration. The A.O on the basis of the aforesaid information, therein vide his letter dated 24.01.2013 called upon the assessee to explain the source of the cash deposit of Rs. 31,19,000/-(supra), as well as the other deposits aggregating to Rs. 20,37,955/-(supra). The A.O thus in the backdrop of the fact that the assessee till date had denied of having made any cash deposit of Rs. 31,54,000/-(supra) with Federal Bank Ltd., Branch: Dadar (West), Mumbai, thus called upon him to show cause as to why the sum total of the aforesaid deposits aggregating to Rs. 51,56,955/- (Rs.31,19,000/- (+) Rs. 20,37,955/-) may not be treated as an unexplained cash credit in his hands u/s. 68 of the 'Act'. 7. The assessee in reply to the aforesaid show cause notice issued by the A.O,....
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....16,82,150/- and Rs. 2,50,000/-, both of which had been rejected/returned by the bank, therefore held that the very receipt of the aforesaid respective amounts therein fortified the factum of there being a correlating income. The A.O thus on the basis of his aforesaid observations made an addition of Rs. 20,37,950/- in the hands of the assessee u/s 68. (iii). SB Account No. 15050100036852 (Cash deposit: Rs. 1,70,000/-): The A.O being of the view that the assessee had failed to substantiate the source of the Opening cash balance of Rs. 1,70,000/- (supra), which was claimed by him to have been utilized for making the cash deposit to the said extent in his aforesaid bank account, therefore, made an addition of Rs. 1,70,000/- in the hands of the assessee. 9. The assessee being aggrieved with the assessment therein assailed the same before the CIT(A). The CIT(A) accepted the contentions of the assessee that the cheques which were deposited and subsequently rejected could not be taken as part of the income of the assessee, because the said amounts had never came to the assessee due to the rejection of the payments against the cheques issued. The CIT(A) further going by the contention ....
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....Dadar (West), Mumbai. It was averred by the ld. D.R that despite the fact that a copy of the AIR information was made available to the assessee, which therein categorically revealed that the department was in possession of information that a cash deposit of Rs. 31,54,000/- was made by the assessee with Federal Bank ltd., Branch: Dadar (West), Mumbai, the latter continued misleading the department and averred that he had only deposited an amount of Rs. 4,01,000/- in his S.B. Account No. 15050100036852 with the said bank. It was thus submitted by the ld. D.R that the assessee despite being cornered by the department however did not come up with clean hands and place the true facts before the A.O, but rather on the contrary left no stone unturned for misleading the A.O. The ld. D.R further submitted that the explanation of the assessee that the cash deposits of Rs. 31,19,000/- (supra) and Rs. 1,70,000/- (supra) represented the sale proceeds of his retail trade business in gold ornaments carried on under the name and style of M/s. Rajendra Enterprises during the year under consideration, was merely an eye wash and thus could not be accepted. The ld. D.R submitted that not only the asse....
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.... and rather restricted his explanation with respect to the cash deposit of Rs. 4,01,000/-(supra) made in his SB Account No. 15050100036852 (supra). We find that even when the A.O vide his letter dated 22.10.2012 brought the fact to the notice of the assessee that he was in possession of AIR information that he had made a cash deposit of Rs. 31,54,000/-(supra) with Federal Bank, Branch: Dadar (West), Mumbai, and called upon the assessee to put forth an explanation as regards the same, the assessee still did not make any shift from his earlier stand and denied of having made any such cash deposit in his bank account with Federal Bank Ltd (supra) and restricted his explanation as regards the cash deposit of Rs. 4,01,000/- made in his SB Account No.15050100036852 during the year under consideration. Thus from a cursory glance over the aforesaid chain of events, it can safely be gathered that the assessee had tried his level best to stall the enquiries being made by the A.O, so that the latter may not gather information about the bank accounts which the assessee was holding with Federal Bank Ltd. However, we find that it was only when the A.O who was in possession of the AIR information....
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....e considered view that the shifting explanation of the assessee with respect to the nature and source of the cash deposit of Rs. 1,70,000/- made in his SB Account No. 15050100036852 with Federal bank Ltd. (supra) also had rightly been rejected by the lower authorities. We find that initially the assessee in his reply to the letter dated 22.12.2012 of the A.O had claimed that the cash deposit of Rs. 1,70,000/- in the aforesaid bank account was funded out of the opening cash in hand lying available with him for the last 7 to 8 years, and for long stuck to his said unsubstantiated explanation. We however find that thereafter the assessee at S.No. 2(a) of his letter dated 18.02.2013 therein shifted from his earlier explanation, and submitted that the entire amount of Rs. 4,01,000/- (which included Rs. 1,70,000/-) deposited in his SB Account No.15050100036852 was out of the sale proceeds of his retail trade business in gold ornaments. We thus in the backdrop of our aforesaid observations are not at all impressed by the explanation of the assessee, either as regards the source of Rs. 31,19,000/-(supra) or Rs. 1,70,000/-(supra), and therefore uphold the observations of the CIT(A) to the s....